In 2009, the wood flooring sector (solid wood, engineered wood and laminates), accounted for around 16%, in value terms, of the total UK floorcoverings sector, itself estimated to be worth around £2 billion in 2009.

Wood & laminate floorcoverings have also experienced a significant fall in demand since 2007 - the value of the market declining by around 20% in the 2008 /2009 period, to just over £300m at manufacturers prices.

Sales at the lower end of the market have been particularly hard hit, with suppliers throughout the supply chain also affected by significant price pressures. The premium/upper end of the market has experienced slightly better, with higher specification of value-added laminates and engineered wood helping to offset some of the value decline.

The past two years have seen a major shift in some of the key factors influencing demand, most significantly the credit crunch and its well documented effects on the stability of the economy and the housing market. Housing starts have slumped by around 50% from their 2007 peak, though mid-late 2009 is seeing some tentative signs of recovery.

Non-domestic construction output is also on a downward trend, with the contract sector now slowing rapidly as major projects come to an end, and the lack of major new investment in commercial offices and retail premises begins to take its toll.

Laminates have seen their share of the total wood flooring product mix decline to around 60% in 2009 - having experienced a significant fall in demand over the 2007-09. Conversely, solid and engineered wood have experienced a less pronounced fall - buoyed in part by stronger activity in the commercial sector, and particularly in terms of engineered wood sales. However, despite share gain, 2009 has proven to be a difficult year, particularly in some key non-residential construction applications.

Imports from Asia more than trebled in value terms from 2004 to 2008 and now account for around 67% of total imports in 2008, with imports from the European Union accounting for 27%.

The outlook for wood flooring is mixed. Laminates are forecast to continue on their downward path as consumers switch to higher specification products, though a recovery in consumer spending should help slow the decline of the sector.

Solid and engineered wood floors have experienced a stronger rate of decline in 2009, though a return to growth is forecast in 2010, albeit just 1% and this will depend on performance in key sectors, such as leisure.

Recovery in the medium term will be restrained, given the uncertainties in the underlying economy and employment prospects. Consumer confidence remains fragile and difficult conditions in many non-residential sectors will undermine the speed of any recovery in the sector. In the longer term, however, prospects will be more influenced by attitudes towards wood flooring which still appear relatively positive in all key market sectors.